If we asked people in the street what they thought of intermediaries I’m sure critics would label them money grabbers or blame them for the hyper-inflation of transfer prices. By contrast supporters might argue that intermediaries constitute an essential part of the football ecosystem. What neither would really discuss is whether FIFA should regulate this group or not, but it’s a key consideration for FIFA at the moment.
In order to understand the context for the oncoming reform in the way intermediaries are regulated we have to cast our minds back to the FIFA Players Agents Regulations issued in 2008. FIFA Players Agents Regulations were a complex system of regulations based on the concept of an “agent” as a person who, for a fee, negotiates employment contracts to conclude transfer agreements.
Under the Agents Regulations system it was actually very difficult to become an agent; you had to be licensed by the relevant association. When qualified you could only represent one party in a negotiation and any international disputes where agents were involved would be settled by the FIFA Players Status Committee.
After a few years of the complex regulations FIFA realised that their system was not up to scratch and did not meet their expectations. Some deficits that FIFA identified were that:
- Only 25% to 30% of acting agents actually had a license;
- Agents and clubs preferred not to report transactions in which they participated;
- There were many discrepancies between national regulations regarding the activities of agents;
Due to these failings FIFA issued the Regulations on Working with Intermediaries in April 2015 and this is the regulatory system that operates today.
Unlike the previous regime, this system is based in the concept of an “intermediary” as a natural or legal person who, for a fee or free of charge, represents players and/or clubs in order to conclude an employment contract or represents clubs in negotiations to conclude transfer agreements. In contravention with the FIFA Players Agents Regulations 2008, FIFA decided to deregulated Agents. This meant that intermediaries no longer needed a license in order to provide services. In fact, any person regardless of their expertise could be involved in a player’s transfer for example. Other relevant changes were that intermediaries were able to represent a player and a club. This meant that dual representation was permitted as long as both the club and the player consented in writing and prior to the start of the negotiations and established which party shall remunerate the intermediary. Furthermore, since intermediaries were out of the football ecosystem, the Player’s Status Committee (or any other FIFA dispute resolution body) no longer had jurisdiction on matters relating to intermediaries.
Yet again FIFA found that such a system of regulations didn’t achieve the desired objectives that they were looking for. During a conference by Emilio García Silvero (Chief Legal Officer, FIFA) entitled “Towards a new Regulatory Framework for the Transfers of Football Players: Evolution or Revolution? held at the “Instituto Superior de Derecho y Economía (ISDE)”, he mentioned:
“It was a mistake to de-regulate agents in 2015”
It seems as if regulation is back in fashion and he hinted that important changes will be introduced including a licensing system administered centrally by FIFA through a web-based examination, which an aspiring intermediary will be required to pass in order to practice. The aim of this was to ensure integrity and regain trust in the profession. Bringing intermediaries back into the fold also affords them access to the effective and efficient dispute resolution systems of FIFA/CAS. FIFA also intended to create a “clearing house” through which all payments to intermediaries will be registered in order to better understand and regulate the way intermediaries are paid. There will also be guidelines that prohibit conflicts of interest in dual representation cases. For example representing:
- Player + Engaging Club = allowed
- Player + Releasing Club = prohibited
- Releasing Club + Engaging club = prohibited
In relation to the famous recommended pay cap for services it is important to mention, that apparently such remuneration would not be limited, as long as all the parties are aware of the payments made to the intermediaries. This increases transparency as all parties must be aware of all different steps undertaken within negotiations, including the agent’s fees and any payments directly or indirectly related to the player. For more information on the pay cap click here. Finally, there will be a sanctioning system in place to deal with non-compliant clubs, players and intermediaries.
It seems that radical change is on the horizon but despite FIFA’s best intentions the effectiveness of the proposed measures remain unclear. Most of the changes seem promising and positive. FIFA’s willingness to admit the failings of the previous system are a sign that changes will continue to be made with the sole purpose of improving the the sport we love. Let’s see how things all unfold…